A. Introduction
1. This is an appeal by Kennedy Shikuku, trading as Eshikhoni Auctioneers ("the Appellant"), against the Ruling and consequential Order of the Chief Magistrate's Court at Bungoma (Hon. C.A.S. Mutai, SPM) delivered on 10th September 2021 in Bungoma CMCC No. 104 of 2010. By that Ruling, the trial Court allowed prayers (2), (3) (4) and (5) of an Application dated 30th June 2021 taken out by the 1st and 2nd Respondents, the effect of which was to recall the warrants of attachment and sale that the Appellant had caused to be issued against the Respondents in execution of his taxed auctioneer's charges, and to shift the burden of meeting those charges away from the Respondents.
2. The Appellant, who acted as the instructed auctioneer in the execution process arising from a judgment that was subsequently set aside, contends that the Ruling was wrong in law and in fact on eight grounds particularised in the Memorandum of Appeal dated and filed in 2024. The 1st and 2nd Respondents oppose the appeal and support the Ruling of the trial Court. The 3rd Respondent did not file separate submissions and appears not to have actively participated in the appeal.
3. I have carefully read and considered the Record of Appeal, the rival written submissions filed by Counsel for the Appellant (M/S Robert Wamalwa & Co. Advocates) and Counsel for the 1st and 2nd Respondents (M/S Masinde & Co. Advocates), together with the authorities relied upon. This being a first appeal from a Ruling on an interlocutory Application rather than from a full trial, my task is to re-evaluate the material that was before the trial Court and the reasoning applied to it, and to reach my own conclusions, while bearing in mind that I did not have the advantage of observing the witnesses (to the limited extent any oral evidence was material) and according appropriate deference to the trial Court's assessment of the conduct of the proceedings before it.
B. Background
4. The dispute has its roots in Bungoma CMCC No. 104 of 2010, in which the Plaintiff, Naomi Nerima Mutachi, obtained what the record describes as an ex parte (interlocutory) judgment against the 1st and 2nd Respondents. Pursuant to that judgment, the Plaintiff instructed the Appellant, a licensed auctioneer trading as Eshikhoni Auctioneers, to levy execution. The Appellant proceeded to attach movable property belonging to the Respondents, and in due course had his bill of costs for the exercise taxed, obtaining a certificate of costs against the Respondents.
5. The Respondents thereafter moved the trial Court by an Application dated 29th June 2020, seeking to set aside the interlocutory judgment on the ground that they had never been served with summons to enter appearance or with the Plaint, that the supporting affidavit of service filed by the process server (Everline Achieng Otieno) was false, and that they had a good defence on the merits. Significantly, that Application also prayed — at what the parties refer to as paragraph 3(v) of the supporting affidavit — that, should the judgment be set aside, the Plaintiff (rather than the Respondents) be condemned to bear any auctioneer's costs occasioned by the wrongful execution, since it was her incorrect claim of proper service that had triggered the ex parte judgment and the resultant attachment.
6. The trial Court heard that Application and, by a Ruling entered in January 2021, set aside the interlocutory judgment, condemned the Respondents (as the applicants in that Application) to pay thrown-away costs of Kshs. 2,500 to the Plaintiff, and directed that the suit proceed to be heard on its merits, with 15 days allowed for the filing of a defence. On the face of the Ruling as reproduced in the record, the Court did not, however, expressly pronounce upon the specific prayer that the Plaintiff bear the Appellant's auctioneer's costs.
7. The Appellant did not accept that outcome as resolving the question of who should bear his charges. He proceeded to tax his bill of costs against the Respondents, obtained a certificate of costs, and moved to execute for the certified sum by way of warrants of attachment directed at the Respondents.
8. The Respondents then filed a further Application dated 30th June 2021, under certificate of urgency, seeking (among other reliefs) stay of execution, the recall and setting aside of the warrants of attachment issued in favour of the Appellant, and an order directing that liability for the Appellant's charges lay with the Plaintiff rather than with the Respondents, on the footing that the execution — and therefore the Appellant's charges — flowed entirely from a judgment that had by then been declared a nullity for want of proper service.
9. The Appellant opposed that Application by a Replying Affidavit and grounds of opposition, contending principally that the Application was res judicata, that it was in substance an appeal against the taxation of his bill masquerading as a fresh Application, that the trial Court lacked jurisdiction to entertain it otherwise than by way of the appeal procedure prescribed under Rule 55 of the Auctioneers Rules, and that Rule 7 of those Rules placed primary liability for his charges on the Respondents as the judgment debtors against whom the warrants had properly been issued.
10. By the Ruling now under appeal, delivered on 10th September 2021, the trial Court granted prayers (2), (3) (4) and (5) of the Application dated 30th June 2021. In its reasoning, the Court reiterated its earlier finding that the interlocutory judgment had been procured on the strength of an exaggerated or improper claim of service, and held that it is trite law that where a Plaintiff obtains an ex parte judgment and instructs auctioneers, and that judgment is later set aside for want of proper service, the auctioneer's costs occasioned by the wrongful execution must be borne by the instructing party — the Plaintiff — relying on the principle applied in Springness & Spinners Ltd v Kimititi Wholesalers Ltd [2020] eKLR, that costs follow the event. On 17th September 2021 the trial Court granted the Appellant leave to appeal, culminating in the present appeal.
C. The Grounds of Appeal
11. The Memorandum of Appeal raises eight grounds, which may fairly be summarised as follows: that the trial magistrate erred —
i. in allowing the Application dated 30th June 2021 when it was res judicata, the question of liability for the Appellant's costs having already been determined (or deemed refused) in the Ruling on the Application dated 29th June 2020;
ii. in failing to address or consider the grounds of opposition raised by the Appellant;
iii. in allowing the Respondents' Application without addressing the issues raised and without giving reasons;
iv. in directing that the Plaintiff bear the Appellant's costs when the Plaintiff was not a party to, and had not participated in, the proceedings culminating in that order;
v. in disregarding Rule 7 of the Auctioneers Rules;
vi. in failing to consider that the Respondents were, in law, obliged to meet the Appellant's charges;
vii. in disregarding Rule 55(4) of the Auctioneers Rules, which prescribes the mode of challenging a taxation decision; and
viii. in entertaining an Application which was, in substance, an appeal against the earlier costs decision, improperly dressed up as a fresh Application.
D. Submissions
Appellant's submissions
12. Counsel for the Appellant submitted that the question of who, as between the Plaintiff and the Respondents, should bear the auctioneer's charges was squarely raised in the Application dated 29th June 2020 and was not expressly granted in the resulting Ruling. Invoking Explanation 5 to Section 7 of the Civil Procedure Act — that any relief claimed but not expressly granted is deemed to have been refused — Counsel argued that the Respondents' proper remedy was to seek review of, or to appeal against, that deemed refusal, and that it was not open to them to re-litigate the identical question before the same Court by way of a fresh Application. Doing so, it was submitted, offended the doctrine of res judicata and required the trial Court, in substance, to sit on appeal from its own earlier decision.
13. It was further submitted that the trial Court's Ruling of 10th September 2021 did not engage with any of the specific objections raised in the Appellant's grounds of opposition — including the res judicata point, the jurisdictional objection founded on Rule 55(4) of the Auctioneers Rules, and the objection that the founding affidavit had been sworn by an Advocate rather than a party — and gave no reasons for rejecting them, in breach of the trial Court's basic duty to render a reasoned decision.
14. On the merits, Counsel relied on Rule 7 of the Auctioneers Rules, which provides that a debtor shall pay the charges of an auctioneer unless the debtor cannot be found, has no attachable goods, or the sale proceeds are insufficient — in which limited circumstances only does liability shift to the creditor. It was submitted that none of those exceptions was shown to apply, that the Respondents were the judgment debtors against whom the warrants had properly issued and had been taxed, and that the trial Court erred in shifting liability to the Plaintiff without any finding that the Rule 7 exceptions were met.
15. Finally, it was submitted that any dispute as to the propriety of the taxed bill or the certificate of costs ought to have been channelled through the appeal mechanism in Rule 55(4) and (5) of the Auctioneers Rules — an appeal to a judge in chambers, filed within seven days of the taxing officer's decision — and that the trial Court had no jurisdiction to revisit that outcome by way of an ordinary Application filed well outside that period.
Respondents' submissions
16. Counsel for the 1st and 2nd Respondents submitted that the Application dated 30th June 2021 was not a re-litigation of anything already decided, but a necessary follow-up Application to give practical effect to the trial Court's own finding — implicit in its earlier Ruling setting aside the interlocutory judgment for improper service — that a Plaintiff who procures judgment on the strength of a false claim of service cannot be permitted to visit the resulting execution costs on an innocent Defendant. It was submitted that costs must follow the event, and that where the underlying judgment is a nullity, everything done in execution of it, including the instructing party's liability for the auctioneer's resulting charges, falls to be revisited.
17. It was submitted that the Respondents' Application was not, on a fair reading, an attempt to reopen a decided question but the only available mechanism by which the warrants that continued to threaten the Respondents' property — notwithstanding the setting aside of the judgment that had spawned them — could be recalled, and that the trial Court, being seized of the execution process in the same suit, retained jurisdiction to make such consequential orders.
18. On Rule 7 of the Auctioneers Rules, it was submitted that the Rule presupposes a valid, subsisting decree; it was never intended to fasten irrecoverable execution costs, occasioned entirely by a Plaintiff's false representation of service, onto a Defendant who has since been vindicated. Reliance was placed on Springness & Spinners Ltd v Kimititi Wholesalers Ltd [2020] eKLR for the proposition that costs of auctioneers occasioned by a subsequently impugned process follow the fate of that process.
19. On jurisdiction, it was submitted that Rule 55 of the Auctioneers Rules governs challenges to the quantum or correctness of a taxation as such; the Respondents were not disputing how much the Appellant was owed, but who, between the Plaintiff and themselves, was liable to pay it — a question falling squarely within the jurisdiction of the Court seized of the substantive suit and its execution, not one requiring a Rule 55(4) appeal to a judge in chambers.
E. Issues for Determination
20. Having considered the grounds of appeal and the rival submissions, I am satisfied that the appeal turns on the following issues:
a. Whether the Application dated 30th June 2021 was barred by the doctrine of res judicata, alternatively offended the principle of functus officio (Grounds 1, 3 and 8);
b. Whether the trial Court discharged its duty to consider and give reasoned findings on the objections raised by the Appellant (Grounds 2 and 3);
c. Whether the order directing the Plaintiff to bear the Appellant's costs, made in proceedings to which she was not a party and had not been heard, offended the rules of natural justice (Ground 4);
d. Whether the trial Court properly applied, or was entitled to depart from, Rule 7 of the Auctioneers Rules in allocating liability for the Appellant's charges (Grounds 5 and 6); and
e. Whether the trial Court lacked jurisdiction to entertain the Application otherwise than by way of the appeal procedure in Rule 55(4) of the Auctioneers Rules (Ground 7).
F. Analysis and Determination
Issue 1: Res judicata and functus officio
21. Section 7 of the Civil Procedure Act (Cap. 21) bars a Court from trying any suit or issue directly and substantially in issue in a former suit between the same parties, litigating under the same title, before a Court competent to try the subsequent suit, where that matter has already been heard and finally decided. The Court of Appeal in John Florence Maritime Services Limited & another v Cabinet Secretary for Transport and Infrastructure & 3 others [2015] eKLR affirms that all of these elements must be established conjunctively before the doctrine will bar a subsequent claim.
22. Explanation 5 to Section 7 provides that any relief claimed but not expressly granted by a decree or order is, for purposes of the section, deemed to have been refused. Applying that principle here: the Respondents' Application dated 29th June 2020 expressly sought, as one of its prayers, an order that the Plaintiff bear any auctioneer's costs occasioned should the interlocutory judgment be set aside. The resulting Ruling, as reproduced in the record, set aside the judgment and dealt with thrown-away costs, but is silent on that specific prayer. By operation of Explanation 5, that prayer must, at least formally, be treated as having been refused when that Ruling was delivered.
23. That refusal, once it took effect, was final in the sense the doctrine requires unless and until set aside on review or appeal. A party dissatisfied with a Court's failure to address a discrete prayer does not, as a matter of orderly procedure, get to renew an identical prayer before the same Court in a fresh Application; the correct course was an Application for review under Order 45 of the Civil Procedure Rules (on the ground of an error apparent on the face of the record, or a matter overlooked), or an appeal. To the extent the Application dated 30th June 2021 sought, in substance, precisely the relief that had already been refused by operation of law — an order fixing the Plaintiff, rather than the Respondents, with liability for the Appellant's charges — I am satisfied that it trenched upon the same parties, the same title, and the same subject matter as the earlier Application, and that the trial Court, having already pronounced (if only by omission) on the point, was not at liberty to revisit it afresh as though writing on a clean slate. To that extent, the doctrine of res judicata, and its close relative functus officio, were engaged, and the Appellant's first and eighth grounds of appeal have force.
24. I would, however, temper that conclusion in one respect. The record equally shows that the Application of 30th June 2021 was prompted by continuing, concrete conduct — the taxation of the Appellant's bill and the issuance of live warrants against the Respondents after the interlocutory judgment had already fallen — which had not been the subject of the earlier Application at all. A Court seized of a suit retains an undoubted jurisdiction to make consequential orders necessary to protect a party from continuing prejudice flowing from process that has itself been rendered void, and such an Application is not automatically res judicata merely because it touches the same general subject matter as an earlier, unrelated prayer. The difficulty in this case is not that the trial Court entertained a follow-up Application as such, but that it did so without ever confronting, on the record, whether what was truly before it was a legitimate consequential Application or an impermissible re-run of a refused prayer. That omission is best addressed under Issue 2 below.
Issue 2: Duty to consider objections and give reasons
25. It is a basic incident of the judicial function that a Court, having been presented with a party's grounds of opposition, must engage with them and explain, even briefly, why they are accepted or rejected. This is not a mere technicality: a reasoned decision allows the losing party to know why it lost and to test that reasoning on appeal, and its absence is itself capable of vitiating a decision.
26. The Appellant's grounds of opposition to the Application dated 30th June 2021 raised, in terms, the objections of res judicata, want of jurisdiction under Rule 55(4) of the Auctioneers Rules, and the propriety of an affidavit sworn by an Advocate rather than a party. The Ruling of 10th September 2021, as extracted in the record, addresses none of these squarely. It recites the history of the matter and restates the trial Court's earlier finding on the question of service, before concluding, without further elaboration, that the Application is granted as to prayers (2), (3), (4)and (5).
27. A trial Court is not obliged to write at exhaustive length on every point raised, but it must be possible, from the Ruling itself, to discern that a properly raised jurisdictional or procedural objection was actually considered and why it was rejected. I am unable, from the record before me, to discern any engagement with the res judicata and Rule 55(4) objections specifically raised by the Appellant. This omission is, in my view, a material irregularity going to the fairness and adequacy of the decision-making process, independent of how the underlying substantive questions are ultimately resolved. Grounds 2 and 3 of the appeal are accordingly made out.
Issue 3: Natural justice — order affecting the Plaintiff
28. It is trite, and has been trite since at least David Oloo Onyango v Attorney-General [1987] eKLR (also reported as Onyango Oloo v Attorney-General [1986–1989] EA 456), that a decision-maker cannot make an order adverse to a person's interests without first affording that person a fair opportunity to be heard; a decision reached in breach of that principle is liable to be treated as null and void, and the fact that the same outcome might have been reached after a fair hearing does not cure the defect.
29. The order under appeal, in its practical effect, fixes the Plaintiff — who was not a party to, and on the record was not served with or heard in, the Application dated 30th June 2021 — with liability to meet the Appellant's auctioneer's charges. Whatever the merits of the underlying principle that a Plaintiff who procures judgment through a false claim of service should bear the resulting execution costs, that principle cannot properly be applied against a specific individual, in a specific sum, in proceedings from which she was absent and unheard. An order of that kind is vulnerable to being treated as a nullity as against her, which would leave the Appellant — who is, after all, the party the order was ostensibly intended to benefit — without any effective or enforceable recourse at all, his valid and subsisting warrants against the Respondents having in the meantime been recalled. Ground 4 of the appeal is well founded, not because the underlying principle invoked by the trial Court is necessarily wrong, but because it was applied to fix a specific liability on a person who was given no opportunity to resist it.
Issue 4: Rule 7 of the Auctioneers Rules
30. Rule 7 of the Auctioneers Rules provides that a debtor shall meet an auctioneer's charges unless the debtor cannot be found, has no goods upon which execution can be levied, or the sale proceeds are insufficient, in which limited circumstances liability shifts to the creditor. On its face, this ordinarily places primary liability on the judgment debtor against whom the warrant issues — here, the Respondents — and none of the Rule's stated exceptions was shown, on the record, to be satisfied.
31. That said, Rule 7 self-evidently presupposes execution levied pursuant to a valid decree. Where, as here, the decree itself is subsequently declared a nullity for want of proper service on the very persons against whom it was entered, a real question arises whether Rule 7's ordinary allocation of liability can simply be transposed without qualification, or whether the equitable principle — that costs occasioned by a wrongfully obtained judgment should not fall on the party wronged by it — operates to displace or qualify Rule 7 in such circumstances. This is a substantial question of law on which the parties are in genuine and reasoned disagreement, each citing a defensible position; it is not, in my view, one that can fairly be resolved on this appeal without the benefit of full argument addressed specifically to that tension, informed by evidence (if any) on whether the Rule 7 exceptions are met. Grounds 5 and 6 accordingly raise a live and unresolved question that ought properly to be determined by the trial Court on a proper rehearing, rather than pre-empted by this Court in the first instance.
Issue 5: Jurisdiction under Rule 55(4) of the Auctioneers Rules
32. Rule 55(4) and (5) of the Auctioneers Rules prescribe that an appeal from a decision of a registrar, magistrate or the Auctioneers Licensing Board on a taxation of an auctioneer's bill of costs lies to a judge in chambers, by way of chamber summons filed within seven days of that decision. This mechanism is concerned with challenges to the taxation itself — whether the sum certified as payable is correct.
33. The Application dated 30th June 2021 did not challenge the quantum of the Appellant's taxed bill; it challenged who, between the Plaintiff and the Respondents, was liable to satisfy it, a question logically anterior to and distinct from the correctness of the taxation. I am not persuaded that Rule 55(4) ousts the jurisdiction of the Court seized of the substantive suit and its execution process to determine that different, allocative question. Ground 7 of the appeal accordingly fails.
G. Disposition
34. For the reasons set out above, I find that Grounds 2, 3 and 4 of the appeal are made out: the trial Court did not demonstrably engage with the Appellant's jurisdictional and res judicata objections, gave no discernible reasons for rejecting them, and made an order fixing the Plaintiff — a non-party to the Application — with liability, without affording her a hearing. I further find that the res judicata objection raised in Grounds 1 and 8 has real substance and must be squarely determined, on a proper record, before the Application dated 30th June 2021 can be finally disposed of. I find Ground 7 not made out. Grounds 5 and 6 raise a genuine and unresolved question of law that should be determined by the trial Court after full argument, rather than by this Court in the first instance.
35. It follows that the Ruling and Order of the trial Court dated 10th September 2021, granting prayers (2), (3), (4) and (5) of the Application dated 30th June 2021, cannot stand and is hereby set aside.
36. The suit and the Application dated 30th June 2021 is remitted to the Chief Magistrate's Court at Bungoma for hearing afresh before a Magistrate other than Hon. C.A.S. Mutai, SPM, with the following directions:
(a) the Plaintiff, Naomi Nerima Mutachi, shall be enjoined and served with the Application, given that any order made is capable of directly affecting her liability;
(b) the trial Court shall specifically consider and pronounce, with reasons, upon the Appellant's objections of res judicata and want of jurisdiction under Rule 55(4) of the Auctioneers Rules; and
(c) should the Application proceed to the merits, the trial Court shall determine, after full argument, the relationship between Rule 7 of the Auctioneers Rules and the equitable principle that a party should not profit in costs from a judgment procured through improper service.
37. Each party shall bear its own costs of this appeal. The costs of the Application dated 30th June 2021 shall be in the discretion of the trial Court on the rehearing, and shall abide the outcome.
38. It is so ordered.
In the presence of:
Mr. Wamalwa for the Appellant
Ms. Mtunda h/b for Mr. Masinde for the Respondents
Court Assistant: Irene Chelang'at
1. This is an appeal by Kennedy Shikuku, trading as Eshikhoni Auctioneers ("the Appellant"), against the Ruling and consequential Order of the Chief Magistrate's Court at Bungoma (Hon. C.A.S. Mutai, SPM) delivered on 10th September 2021 in Bungoma CMCC No. 104 of 2010. By that Ruling, the trial Court allowed prayers (2), (3) (4) and (5) of an Application dated 30th June 2021 taken out by the 1st and 2nd Respondents, the effect of which was to recall the warrants of attachment and sale that the Appellant had caused to be issued against the Respondents in execution of his taxed auctioneer's charges, and to shift the burden of meeting those charges away from the Respondents.
2. The Appellant, who acted as the instructed auctioneer in the execution process arising from a judgment that was subsequently set aside, contends that the Ruling was wrong in law and in fact on eight grounds particularised in the Memorandum of Appeal dated and filed in 2024. The 1st and 2nd Respondents oppose the appeal and support the Ruling of the trial Court. The 3rd Respondent did not file separate submissions and appears not to have actively participated in the appeal.
3. I have carefully read and considered the Record of Appeal, the rival written submissions filed by Counsel for the Appellant (M/S Robert Wamalwa & Co. Advocates) and Counsel for the 1st and 2nd Respondents (M/S Masinde & Co. Advocates), together with the authorities relied upon. This being a first appeal from a Ruling on an interlocutory Application rather than from a full trial, my task is to re-evaluate the material that was before the trial Court and the reasoning applied to it, and to reach my own conclusions, while bearing in mind that I did not have the advantage of observing the witnesses (to the limited extent any oral evidence was material) and according appropriate deference to the trial Court's assessment of the conduct of the proceedings before it.
B. Background
4. The dispute has its roots in Bungoma CMCC No. 104 of 2010, in which the Plaintiff, Naomi Nerima Mutachi, obtained what the record describes as an ex parte (interlocutory) judgment against the 1st and 2nd Respondents. Pursuant to that judgment, the Plaintiff instructed the Appellant, a licensed auctioneer trading as Eshikhoni Auctioneers, to levy execution. The Appellant proceeded to attach movable property belonging to the Respondents, and in due course had his bill of costs for the exercise taxed, obtaining a certificate of costs against the Respondents.
5. The Respondents thereafter moved the trial Court by an Application dated 29th June 2020, seeking to set aside the interlocutory judgment on the ground that they had never been served with summons to enter appearance or with the Plaint, that the supporting affidavit of service filed by the process server (Everline Achieng Otieno) was false, and that they had a good defence on the merits. Significantly, that Application also prayed — at what the parties refer to as paragraph 3(v) of the supporting affidavit — that, should the judgment be set aside, the Plaintiff (rather than the Respondents) be condemned to bear any auctioneer's costs occasioned by the wrongful execution, since it was her incorrect claim of proper service that had triggered the ex parte judgment and the resultant attachment.
6. The trial Court heard that Application and, by a Ruling entered in January 2021, set aside the interlocutory judgment, condemned the Respondents (as the applicants in that Application) to pay thrown-away costs of Kshs. 2,500 to the Plaintiff, and directed that the suit proceed to be heard on its merits, with 15 days allowed for the filing of a defence. On the face of the Ruling as reproduced in the record, the Court did not, however, expressly pronounce upon the specific prayer that the Plaintiff bear the Appellant's auctioneer's costs.
7. The Appellant did not accept that outcome as resolving the question of who should bear his charges. He proceeded to tax his bill of costs against the Respondents, obtained a certificate of costs, and moved to execute for the certified sum by way of warrants of attachment directed at the Respondents.
8. The Respondents then filed a further Application dated 30th June 2021, under certificate of urgency, seeking (among other reliefs) stay of execution, the recall and setting aside of the warrants of attachment issued in favour of the Appellant, and an order directing that liability for the Appellant's charges lay with the Plaintiff rather than with the Respondents, on the footing that the execution — and therefore the Appellant's charges — flowed entirely from a judgment that had by then been declared a nullity for want of proper service.
9. The Appellant opposed that Application by a Replying Affidavit and grounds of opposition, contending principally that the Application was res judicata, that it was in substance an appeal against the taxation of his bill masquerading as a fresh Application, that the trial Court lacked jurisdiction to entertain it otherwise than by way of the appeal procedure prescribed under Rule 55 of the Auctioneers Rules, and that Rule 7 of those Rules placed primary liability for his charges on the Respondents as the judgment debtors against whom the warrants had properly been issued.
10. By the Ruling now under appeal, delivered on 10th September 2021, the trial Court granted prayers (2), (3) (4) and (5) of the Application dated 30th June 2021. In its reasoning, the Court reiterated its earlier finding that the interlocutory judgment had been procured on the strength of an exaggerated or improper claim of service, and held that it is trite law that where a Plaintiff obtains an ex parte judgment and instructs auctioneers, and that judgment is later set aside for want of proper service, the auctioneer's costs occasioned by the wrongful execution must be borne by the instructing party — the Plaintiff — relying on the principle applied in Springness & Spinners Ltd v Kimititi Wholesalers Ltd [2020] eKLR, that costs follow the event. On 17th September 2021 the trial Court granted the Appellant leave to appeal, culminating in the present appeal.
C. The Grounds of Appeal
11. The Memorandum of Appeal raises eight grounds, which may fairly be summarised as follows: that the trial magistrate erred —
i. in allowing the Application dated 30th June 2021 when it was res judicata, the question of liability for the Appellant's costs having already been determined (or deemed refused) in the Ruling on the Application dated 29th June 2020;
ii. in failing to address or consider the grounds of opposition raised by the Appellant;
iii. in allowing the Respondents' Application without addressing the issues raised and without giving reasons;
iv. in directing that the Plaintiff bear the Appellant's costs when the Plaintiff was not a party to, and had not participated in, the proceedings culminating in that order;
v. in disregarding Rule 7 of the Auctioneers Rules;
vi. in failing to consider that the Respondents were, in law, obliged to meet the Appellant's charges;
vii. in disregarding Rule 55(4) of the Auctioneers Rules, which prescribes the mode of challenging a taxation decision; and
viii. in entertaining an Application which was, in substance, an appeal against the earlier costs decision, improperly dressed up as a fresh Application.
D. Submissions
Appellant's submissions
12. Counsel for the Appellant submitted that the question of who, as between the Plaintiff and the Respondents, should bear the auctioneer's charges was squarely raised in the Application dated 29th June 2020 and was not expressly granted in the resulting Ruling. Invoking Explanation 5 to Section 7 of the Civil Procedure Act — that any relief claimed but not expressly granted is deemed to have been refused — Counsel argued that the Respondents' proper remedy was to seek review of, or to appeal against, that deemed refusal, and that it was not open to them to re-litigate the identical question before the same Court by way of a fresh Application. Doing so, it was submitted, offended the doctrine of res judicata and required the trial Court, in substance, to sit on appeal from its own earlier decision.
13. It was further submitted that the trial Court's Ruling of 10th September 2021 did not engage with any of the specific objections raised in the Appellant's grounds of opposition — including the res judicata point, the jurisdictional objection founded on Rule 55(4) of the Auctioneers Rules, and the objection that the founding affidavit had been sworn by an Advocate rather than a party — and gave no reasons for rejecting them, in breach of the trial Court's basic duty to render a reasoned decision.
14. On the merits, Counsel relied on Rule 7 of the Auctioneers Rules, which provides that a debtor shall pay the charges of an auctioneer unless the debtor cannot be found, has no attachable goods, or the sale proceeds are insufficient — in which limited circumstances only does liability shift to the creditor. It was submitted that none of those exceptions was shown to apply, that the Respondents were the judgment debtors against whom the warrants had properly issued and had been taxed, and that the trial Court erred in shifting liability to the Plaintiff without any finding that the Rule 7 exceptions were met.
15. Finally, it was submitted that any dispute as to the propriety of the taxed bill or the certificate of costs ought to have been channelled through the appeal mechanism in Rule 55(4) and (5) of the Auctioneers Rules — an appeal to a judge in chambers, filed within seven days of the taxing officer's decision — and that the trial Court had no jurisdiction to revisit that outcome by way of an ordinary Application filed well outside that period.
Respondents' submissions
16. Counsel for the 1st and 2nd Respondents submitted that the Application dated 30th June 2021 was not a re-litigation of anything already decided, but a necessary follow-up Application to give practical effect to the trial Court's own finding — implicit in its earlier Ruling setting aside the interlocutory judgment for improper service — that a Plaintiff who procures judgment on the strength of a false claim of service cannot be permitted to visit the resulting execution costs on an innocent Defendant. It was submitted that costs must follow the event, and that where the underlying judgment is a nullity, everything done in execution of it, including the instructing party's liability for the auctioneer's resulting charges, falls to be revisited.
17. It was submitted that the Respondents' Application was not, on a fair reading, an attempt to reopen a decided question but the only available mechanism by which the warrants that continued to threaten the Respondents' property — notwithstanding the setting aside of the judgment that had spawned them — could be recalled, and that the trial Court, being seized of the execution process in the same suit, retained jurisdiction to make such consequential orders.
18. On Rule 7 of the Auctioneers Rules, it was submitted that the Rule presupposes a valid, subsisting decree; it was never intended to fasten irrecoverable execution costs, occasioned entirely by a Plaintiff's false representation of service, onto a Defendant who has since been vindicated. Reliance was placed on Springness & Spinners Ltd v Kimititi Wholesalers Ltd [2020] eKLR for the proposition that costs of auctioneers occasioned by a subsequently impugned process follow the fate of that process.
19. On jurisdiction, it was submitted that Rule 55 of the Auctioneers Rules governs challenges to the quantum or correctness of a taxation as such; the Respondents were not disputing how much the Appellant was owed, but who, between the Plaintiff and themselves, was liable to pay it — a question falling squarely within the jurisdiction of the Court seized of the substantive suit and its execution, not one requiring a Rule 55(4) appeal to a judge in chambers.
E. Issues for Determination
20. Having considered the grounds of appeal and the rival submissions, I am satisfied that the appeal turns on the following issues:
a. Whether the Application dated 30th June 2021 was barred by the doctrine of res judicata, alternatively offended the principle of functus officio (Grounds 1, 3 and 8);
b. Whether the trial Court discharged its duty to consider and give reasoned findings on the objections raised by the Appellant (Grounds 2 and 3);
c. Whether the order directing the Plaintiff to bear the Appellant's costs, made in proceedings to which she was not a party and had not been heard, offended the rules of natural justice (Ground 4);
d. Whether the trial Court properly applied, or was entitled to depart from, Rule 7 of the Auctioneers Rules in allocating liability for the Appellant's charges (Grounds 5 and 6); and
e. Whether the trial Court lacked jurisdiction to entertain the Application otherwise than by way of the appeal procedure in Rule 55(4) of the Auctioneers Rules (Ground 7).
F. Analysis and Determination
Issue 1: Res judicata and functus officio
21. Section 7 of the Civil Procedure Act (Cap. 21) bars a Court from trying any suit or issue directly and substantially in issue in a former suit between the same parties, litigating under the same title, before a Court competent to try the subsequent suit, where that matter has already been heard and finally decided. The Court of Appeal in John Florence Maritime Services Limited & another v Cabinet Secretary for Transport and Infrastructure & 3 others [2015] eKLR affirms that all of these elements must be established conjunctively before the doctrine will bar a subsequent claim.
22. Explanation 5 to Section 7 provides that any relief claimed but not expressly granted by a decree or order is, for purposes of the section, deemed to have been refused. Applying that principle here: the Respondents' Application dated 29th June 2020 expressly sought, as one of its prayers, an order that the Plaintiff bear any auctioneer's costs occasioned should the interlocutory judgment be set aside. The resulting Ruling, as reproduced in the record, set aside the judgment and dealt with thrown-away costs, but is silent on that specific prayer. By operation of Explanation 5, that prayer must, at least formally, be treated as having been refused when that Ruling was delivered.
23. That refusal, once it took effect, was final in the sense the doctrine requires unless and until set aside on review or appeal. A party dissatisfied with a Court's failure to address a discrete prayer does not, as a matter of orderly procedure, get to renew an identical prayer before the same Court in a fresh Application; the correct course was an Application for review under Order 45 of the Civil Procedure Rules (on the ground of an error apparent on the face of the record, or a matter overlooked), or an appeal. To the extent the Application dated 30th June 2021 sought, in substance, precisely the relief that had already been refused by operation of law — an order fixing the Plaintiff, rather than the Respondents, with liability for the Appellant's charges — I am satisfied that it trenched upon the same parties, the same title, and the same subject matter as the earlier Application, and that the trial Court, having already pronounced (if only by omission) on the point, was not at liberty to revisit it afresh as though writing on a clean slate. To that extent, the doctrine of res judicata, and its close relative functus officio, were engaged, and the Appellant's first and eighth grounds of appeal have force.
24. I would, however, temper that conclusion in one respect. The record equally shows that the Application of 30th June 2021 was prompted by continuing, concrete conduct — the taxation of the Appellant's bill and the issuance of live warrants against the Respondents after the interlocutory judgment had already fallen — which had not been the subject of the earlier Application at all. A Court seized of a suit retains an undoubted jurisdiction to make consequential orders necessary to protect a party from continuing prejudice flowing from process that has itself been rendered void, and such an Application is not automatically res judicata merely because it touches the same general subject matter as an earlier, unrelated prayer. The difficulty in this case is not that the trial Court entertained a follow-up Application as such, but that it did so without ever confronting, on the record, whether what was truly before it was a legitimate consequential Application or an impermissible re-run of a refused prayer. That omission is best addressed under Issue 2 below.
Issue 2: Duty to consider objections and give reasons
25. It is a basic incident of the judicial function that a Court, having been presented with a party's grounds of opposition, must engage with them and explain, even briefly, why they are accepted or rejected. This is not a mere technicality: a reasoned decision allows the losing party to know why it lost and to test that reasoning on appeal, and its absence is itself capable of vitiating a decision.
26. The Appellant's grounds of opposition to the Application dated 30th June 2021 raised, in terms, the objections of res judicata, want of jurisdiction under Rule 55(4) of the Auctioneers Rules, and the propriety of an affidavit sworn by an Advocate rather than a party. The Ruling of 10th September 2021, as extracted in the record, addresses none of these squarely. It recites the history of the matter and restates the trial Court's earlier finding on the question of service, before concluding, without further elaboration, that the Application is granted as to prayers (2), (3), (4)and (5).
27. A trial Court is not obliged to write at exhaustive length on every point raised, but it must be possible, from the Ruling itself, to discern that a properly raised jurisdictional or procedural objection was actually considered and why it was rejected. I am unable, from the record before me, to discern any engagement with the res judicata and Rule 55(4) objections specifically raised by the Appellant. This omission is, in my view, a material irregularity going to the fairness and adequacy of the decision-making process, independent of how the underlying substantive questions are ultimately resolved. Grounds 2 and 3 of the appeal are accordingly made out.
Issue 3: Natural justice — order affecting the Plaintiff
28. It is trite, and has been trite since at least David Oloo Onyango v Attorney-General [1987] eKLR (also reported as Onyango Oloo v Attorney-General [1986–1989] EA 456), that a decision-maker cannot make an order adverse to a person's interests without first affording that person a fair opportunity to be heard; a decision reached in breach of that principle is liable to be treated as null and void, and the fact that the same outcome might have been reached after a fair hearing does not cure the defect.
29. The order under appeal, in its practical effect, fixes the Plaintiff — who was not a party to, and on the record was not served with or heard in, the Application dated 30th June 2021 — with liability to meet the Appellant's auctioneer's charges. Whatever the merits of the underlying principle that a Plaintiff who procures judgment through a false claim of service should bear the resulting execution costs, that principle cannot properly be applied against a specific individual, in a specific sum, in proceedings from which she was absent and unheard. An order of that kind is vulnerable to being treated as a nullity as against her, which would leave the Appellant — who is, after all, the party the order was ostensibly intended to benefit — without any effective or enforceable recourse at all, his valid and subsisting warrants against the Respondents having in the meantime been recalled. Ground 4 of the appeal is well founded, not because the underlying principle invoked by the trial Court is necessarily wrong, but because it was applied to fix a specific liability on a person who was given no opportunity to resist it.
Issue 4: Rule 7 of the Auctioneers Rules
30. Rule 7 of the Auctioneers Rules provides that a debtor shall meet an auctioneer's charges unless the debtor cannot be found, has no goods upon which execution can be levied, or the sale proceeds are insufficient, in which limited circumstances liability shifts to the creditor. On its face, this ordinarily places primary liability on the judgment debtor against whom the warrant issues — here, the Respondents — and none of the Rule's stated exceptions was shown, on the record, to be satisfied.
31. That said, Rule 7 self-evidently presupposes execution levied pursuant to a valid decree. Where, as here, the decree itself is subsequently declared a nullity for want of proper service on the very persons against whom it was entered, a real question arises whether Rule 7's ordinary allocation of liability can simply be transposed without qualification, or whether the equitable principle — that costs occasioned by a wrongfully obtained judgment should not fall on the party wronged by it — operates to displace or qualify Rule 7 in such circumstances. This is a substantial question of law on which the parties are in genuine and reasoned disagreement, each citing a defensible position; it is not, in my view, one that can fairly be resolved on this appeal without the benefit of full argument addressed specifically to that tension, informed by evidence (if any) on whether the Rule 7 exceptions are met. Grounds 5 and 6 accordingly raise a live and unresolved question that ought properly to be determined by the trial Court on a proper rehearing, rather than pre-empted by this Court in the first instance.
Issue 5: Jurisdiction under Rule 55(4) of the Auctioneers Rules
32. Rule 55(4) and (5) of the Auctioneers Rules prescribe that an appeal from a decision of a registrar, magistrate or the Auctioneers Licensing Board on a taxation of an auctioneer's bill of costs lies to a judge in chambers, by way of chamber summons filed within seven days of that decision. This mechanism is concerned with challenges to the taxation itself — whether the sum certified as payable is correct.
33. The Application dated 30th June 2021 did not challenge the quantum of the Appellant's taxed bill; it challenged who, between the Plaintiff and the Respondents, was liable to satisfy it, a question logically anterior to and distinct from the correctness of the taxation. I am not persuaded that Rule 55(4) ousts the jurisdiction of the Court seized of the substantive suit and its execution process to determine that different, allocative question. Ground 7 of the appeal accordingly fails.
G. Disposition
34. For the reasons set out above, I find that Grounds 2, 3 and 4 of the appeal are made out: the trial Court did not demonstrably engage with the Appellant's jurisdictional and res judicata objections, gave no discernible reasons for rejecting them, and made an order fixing the Plaintiff — a non-party to the Application — with liability, without affording her a hearing. I further find that the res judicata objection raised in Grounds 1 and 8 has real substance and must be squarely determined, on a proper record, before the Application dated 30th June 2021 can be finally disposed of. I find Ground 7 not made out. Grounds 5 and 6 raise a genuine and unresolved question of law that should be determined by the trial Court after full argument, rather than by this Court in the first instance.
35. It follows that the Ruling and Order of the trial Court dated 10th September 2021, granting prayers (2), (3), (4) and (5) of the Application dated 30th June 2021, cannot stand and is hereby set aside.
36. The suit and the Application dated 30th June 2021 is remitted to the Chief Magistrate's Court at Bungoma for hearing afresh before a Magistrate other than Hon. C.A.S. Mutai, SPM, with the following directions:
(a) the Plaintiff, Naomi Nerima Mutachi, shall be enjoined and served with the Application, given that any order made is capable of directly affecting her liability;
(b) the trial Court shall specifically consider and pronounce, with reasons, upon the Appellant's objections of res judicata and want of jurisdiction under Rule 55(4) of the Auctioneers Rules; and
(c) should the Application proceed to the merits, the trial Court shall determine, after full argument, the relationship between Rule 7 of the Auctioneers Rules and the equitable principle that a party should not profit in costs from a judgment procured through improper service.
37. Each party shall bear its own costs of this appeal. The costs of the Application dated 30th June 2021 shall be in the discretion of the trial Court on the rehearing, and shall abide the outcome.
38. It is so ordered.
In the presence of:
Mr. Wamalwa for the Appellant
Ms. Mtunda h/b for Mr. Masinde for the Respondents
Court Assistant: Irene Chelang'at